Browsing Department of International Economics and Management (INT) by Author "Gammeltoft, Peter"
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Gammeltoft, Peter; Tarmidi, Lepi T. (Frederiksberg, 2011)[More information][Less information]
Abstract: China‟s increasing integration with the world economy is met with much anticipation and much anxiety in the Southeast Asian region. In Indonesia, there is intense interest in Chinese foreign direct investment (FDI), not only among academics but also among policy makers, industrialists and the general public. So much more surprising is the fact that no systematic study of Chinese FDI in Indonesia has been undertaken to date. The current paper contributes to filling this gap and analyses the current composition as well as the historical evolution of Chinese FDI in Indonesia. Relying on a survey conducted in 2008 among Chinese invested enterprises supplemented with available official statistics and secondary data, the study finds that Chinese FDI in Indonesia is performed by mixed entities: some are owned by central government, some by regional government and some are private firms. In the case of joint ventures, their local partners are mostly local Chinese, except in the infrastructure, mining and energy sector where their local partners are Indonesian state-owned enterprises. Where the local developmental effects are concerned, a picture emerges where Chinese investments, at this early period of their internationalization, are likely to give rise to a more modest extent of positive spillovers than investor from more economically advanced countries. This stems from the sectors, investment motives and operational strategies of Chinese investors, the heritage of ethnic tension and segmentation of the economic system along ethnic lines in Indonesia, and the likelihood that Chinese MNCs as latecomers are more vertically integrated than their developed-country counterparts. Finally, considering the evolution of Chinese investments in Indonesia over time, investments have evolved from being individual and isolated projects to acquiring more systemic properties. Chinese companies have acquired a broader sectoral presence in Indonesia and Chinese invested companies in e.g. extractive or manufacturing activities can increasingly rely on complementary Chinese investments in logistics, travel, finance etc. URI: http://hdl.handle.net/10398/8397 Files in this item: 1
Peter_Gammeltoft_2011.pdf (575.2Kb) -
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Abstract: South Korean and Taiwanese brands have long been household names. Today, however, the names of transnational companies (TNCs) from an increasingly diverse set of emerging and developing economies are regularly making if not the dinner table conversation then at least the headlines of the international business press. This reflects that companies such as Mittal and Tata (India), China National Offshore Oil Corporation (CNOOC), Haier and Lenovo (PRC), Embraer (Brazil), SAPMiller (South Africa), and Cemex (Mexico) are foraying ever deeper into the international economy and increasingly investing abroad. Even though FDI usually constitutes only a minor part of countries’ total capital formation, the relationships between FDI and economic growth, welfare, and industrial upgrading in developing countries have been the object of long and extensive treatment in the literature. However, the literature has overwhelmingly focused on the impact of outward FDI from developed countries into recipient developing countries. Much less analyzed has been the increasingly important phenomenon of outward FDI (OFDI) from the developing countries themselves, be it into developed or into other developing countries. Apart from a few early pioneering studies (Lecraw 1977; Lall 1983; Wells 1983; Agarwal 1985) only few studies have been made so far of outward investment from emerging and developing economies. This is in spite of the fact that the value of outward FDI stock from developing countries reached USD859 billion in 2003, up from USD129 billion in 1990, and has increased 11 times since 1985. A limited number of recent studies do exist, though (e.g. Cai 1999; Lecraw 1993; van Hoesel 1999; Tolentino 1993; Andreff 2003; Chudnovsky and López 2000; Bulatov 1998, Yeung 2000). Furthermore, academic interest in the subject picked up considerably with the publication of UNCTAD’s 2006 World Investment Report, which was dedicated to the subject of FDI from developing and transition economies. The report was succeeded by a number of journal special issues (e.g. JIBS 2007, JIM forthcoming, TC forthcoming) and books (e.g. Goldstein 2007; Benito and Narula 2007). This paper takes stock of the mounting trend of outward FDI from emerging economies, with special focus on a group of five countries, which are becoming increasingly economically and politically influential, viz. the ‘BRICS’ countries. An ‘S’ is appended here to the conventional acronym of ‘BRIC’ (Brazil, Russia, India, China) to include the largest economy on the African continent, South Africa. The five BRICS countries produced some USD25 billion of outward FDI flows in 2004, corresponding to some 3 percent of world FDI flows and well over half (61 percent) of total developing country outflows. OFDI from the BRICS countries has grown rapidly over the last few years, while still remaining modest compared to many developed countries. Following a brief discussion of FDI and emerging economies in general the article proceeds to hypothesise that the increase we currently observe in outward investment from emerging and developing economies may constitute a third ‘wave’ of OFDI, distinct from the two previous waves depicted in the literature, and outlines the contours of such a wave. An empirical analysis OFDI from the BRICS countries follows, conducted at three levels: global (what is the extent, directions, etc. of outward FDI); sectoral (in which sectors is outward FDI significant); and firm level, identifying a small number of particularly interesting TNCs from emerging and developing economies URI: http://hdl.handle.net/10398/6567 Files in this item: 1
ijtg+ofdi+pga+w+general+fdi-2.pdf (304.2Kb)
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